Abandoned building law: Options for contractors, homeowners

Walter Conlon
Walter Conlonhttps://www.farmhandsllc.com/
Retired Muscatine attorney Walter Conlon, who served in the Iowa House from 1977-1982, is the president of Farm Hands, LLC, a company which recruits foreign agricultural workers and processes their visa paperwork so that they can work for American farmers.

Muscatine Living

MUSCATINE, Iowa–Muscatine, like other Iowa communities, has been plagued by abandoned buildings, mainly, but not exclusively, residential. According to the city housing office, dozens of Muscatine properties have been posted by the city for vacancy and other housing violations.

As any homeowner knows, an abandoned property in the neighborhood depresses property values, and often, when the property is taken over by squatters or worse, its quality of life and public safety.

The 2019 Iowa legislature, in a bill shepherded through by Muscatine Senator Mark Lofgren, attacked this problem by giving people interested in fixing up these properties some powerful tools – to oversimplify somewhat, a person willing and able to fix up a vacant and deteriorating property can essentially buy it for unpaid property taxes and approximately $10,000 of legal and associated costs.

Under the new law, a neighboring property owner, the city, or a nonprofit housing association could sue the current owners and lien-holders to force rehabilitation. If the court finds the property to be vacant and in need of repair, it would give the current owners and mortgage creditors three choices: fix the property up themselves, reimburse the plaintiff in the restoration action for his legal and restoration costs, or forfeit all their rights in the property.

The new law offers opportunities, not only to local would-be homeowners, but also to local businesses who are ready and able to put the law to work. For example, repair and restoration contractors can use abandoned buildings to keep their workers busy during otherwise slow business seasons. Similarly, people interested in restoring historic properties will find it easier to get the properties from owners not committed to maintaining them.

Under the new law, the first step would be to have the municipal housing inspector verify that the property is abandoned and in need of repair, and to let the proposed contractor determine whether the property can be economically fixed up. Then, one would go to court to have the judge give the current owners and mortgage lenders one last chance to fix up the property themselves. Then, if the current owners and lenders don’t step up to the plate, the court would put the property in receivership. The receiver would be able to write a mortgage superior to the interests of the owners and current lien-holders to pay for the rehabilitation and legal costs. When the property repairs are completed, this mortgage would then be foreclosed, in most cases by a speedy procedure for vacant properties provided for in current law. If the current owners or lienholders don’t pay off the mortgage, they would lose all their rights against the property, and the owner of the receiver’s mortgage would then own the property free and clear.

Anyone interested in restoration should first contact the city housing office to obtain a list of posted properties. Once you have scouted a promising property, you should consult with a lawyer experienced in real property to begin the process. Finally, anyone desiring further information is welcome to contact me at [email protected].

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